FBI ar­rests man ac­cused of scam­ming $4.2M in fake dig­i­tal cash scheme

Star-Telegram - - News - BY MITCH MITCHELL mitch­[email protected]­gram.com

A man who claimed to own the world’s first de­cen­tral­ized bank plat­form was ar­rested by FBI agents Wed­nes­day, ac­cused of cheat­ing in­vestors out of more than $4.2 mil­lion in a cryp­tocur­rency scheme, ac­cord­ing to the U.S. at­tor­ney’s of­fice.

Jared Rice Sr., 30, was in­dicted on three counts of se­cu­ri­ties fraud and three counts of wire fraud, stem­ming from an in­ves­ti­ga­tion and civil ac­tion filed this year by the Fort Worth re­gional of­fice of the Se­cu­ri­ties and Ex­change Com­mis­sion.

Rice is ac­cused of ly­ing to in­vestors about AriseBank, which was built on a cur­rency he called AriseCoin. Rice told in­vestors he could of­fer gov­ern­ment in­sured ac­counts and bank­ing ser­vices, which in­cluded Visabrand credit and debit cards, and cryp­tocur­rency ser­vices.

The truth was that AriseBank could not by law con­duct bank­ing busi­ness in Texas, was not FDIC in­sured and did not have any sort of part­ner­ship with Visa, a news re­lease from the U.S. at­tor­ney’s of­fice said.

Rice is also ac­cused of ly­ing about an ini­tial coin of­fer­ing he said raised $600 mil­lion in a few weeks. Rice failed to tell in­vestors that he had pleaded guilty to state felony charges in a prior in­ter­net-re­lated busi­ness scheme.

Mean­while, Rice en­ticed hold­ers of other dig­i­tal cur­ren­cies such as Bit­coin, Ethereum, Lite­coin and Fiat cur­rency to trade those for AriseCoins, the re­lease said.

Rice be­gan pro­mot­ing AriseBank per­haps as early as June 2017 through press re­leases, video in­ter­views, on Face­book and Twit­ter and his own web­sites, ac­cord­ing to a re­cently un­sealed fed­eral grand jury in­dict­ment.

The gov­ern­ment also al­leges that Rice des­ig­nated the names of sev­eral prod­ucts as trade­marked in­tel­lec­tual prop­erty when in fact none of those names were trade­marked in the United States, the in­dict­ment states.

De­spite what Rice said, AriseBank was not a bank, the in­dict­ment said.

Rice also lied about hav­ing ac­quired two tra­di­tional banks, the in­dict­ment said. Ac­cord­ing to a com­plaint filed in Jan­uary by the Se­cu­ri­ties and Ex­change Com­mis­sion, Rice claimed that nei­ther he nor AriseCoin was sub­ject to SEC reg­u­la­tion.

The Fort Worth SEC branch dis­agreed and filed a civil ac­tion against Rice, Ar­sieBank and an­other de­fen­dant.

Rice is on pro­ba­tion for forg­ing a Texas Sec­re­tary of State in­cor­po­ra­tion doc­u­ment and for a theft con­vic­tion for steal­ing funds pro­vided by an in­vestor, court doc­u­ments show.

He spent the money he ob­tained from in­vestors on his girl­friend, on a fam­ily law at­tor­ney, on ho­tels, food, cloth­ing and Uber rides, the in­dict­ment said.

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